What Was the RBI Master Direction on Export of Goods and Services, and What Replaced It?
- Author:
- Manoj Sharma
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- Editorial team
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Short answer
The RBI Master Direction on Export of Goods and Services was RBI's compiled rulebook for export receipts, issued on 1 January 2016. It was superseded on 1 October 2026. Exporters now follow the FEMA (Export and Import of Goods and Services) Regulations, 2026 and A.P. (DIR Series) Circular No. 20, which keep nine-month realisation.
| Applies to | Governed by | Deadline | Penalty | Last verified |
|---|---|---|---|---|
| Exporters of goods, software and services from India, including freelancers paid from abroad, and the AD banks that handle their receipts | Up to 30 September 2026: Master Direction No. 16/2015-16 and the 2015 export regulations. From 1 October 2026: FEMA 23(R)/2026-RB and A.P. (DIR Series) Circular No. 20 | Realise within 9 months of invoice (services) or shipment (goods), 12 months if invoiced or settled in rupees; services EDF within 30 days from the end of the invoice month | Proceeds unrealised more than one year past the due or extended date: further exports only against full advance or an irrevocable letter of credit (Regulation 13) | 8 Oct 2026 |
What was the RBI Master Direction on Export of Goods and Services?
The RBI Master Direction on Export of Goods and Services was a single document, FED Master Direction No. 16/2015-16, that compiled RBI's instructions to AD banks on export receipts. It was last updated on 17 July 2026 and stopped applying on 1 October 2026 (A.P. (DIR Series) Circular No. 20, para 4).
- Legal base: It was issued under sections 10(4) and 11(1) of FEMA and read with the 2015 export regulations, Notification FEMA 23(R)/2015-RB (Master Direction, opening paras).
- Part A: General rules, including the realisation period, manner of receipt, EEFC accounts, project exports and factoring (Master Direction, Part A).
- Part B: The EDF and SOFTEX declaration procedure for goods and software, and a note that services with no prescribed form needed no declaration (Master Direction, paras B.5 and B.7).
- Part C: AD bank duties: advances, extensions, reduction in value, write-off, set-off, the exporters' caution list, eBRC and EDPMS closure (Master Direction, Part C).
- Part D: Remittances linked to exports, such as agency commission and refund of export proceeds (Master Direction, Part D).
- Replacement: From 1 October 2026 the rules sit in the FEMA (Export and Import of Goods and Services) Regulations, 2026, which also cover imports and merchanting trade.
If you are reading a guide or bank form that quotes a Master Direction paragraph number, check the matching rule in the 2026 regulations before relying on it.
Who do the rules that replaced the RBI Master Direction on Export of Goods and Services apply to?
The 2026 rules apply to every exporter of goods, software and services from India and to the AD banks that handle export receipts. The regulations state that services include software, so one framework now covers all three (Regulation 2(1)).
| Entity type | Applicable | Why | Best for |
|---|---|---|---|
| Freelancer or consultant exporting services | Yes | Must realise the full value within nine months of invoice (Regulation 5(1)(a)) | Individuals billing foreign clients |
| Software exporter | Yes | Software is treated as a service and is declared on the EDF to an AD bank, STPI or SEZ authority (Regulation 2(1)(f)(iii)) | IT firms that used SOFTEX until September 2026 |
| Goods exporter | Yes | Files the EDF at the time of export, deemed part of the shipping bill at EDI ports (Regulation 3(1)) | Manufacturers and merchant exporters |
| AD bank | Yes | Must follow up realisation, update EDPMS and publish its export policy and SOP (Regulations 5(2), 18 and 19) | Exporters who want to know what their bank must do |
| Merchant trader | Yes | Both legs must complete within six months unless the AD bank extends (Regulation 16) | Traders buying abroad and selling abroad |
| Traveller carrying personal effects | No | Not treated as an exporter for these regulations (second proviso to Regulation 3(1)) | People moving abroad with their belongings |
How do the export rules work from 1 October 2026 now that the RBI Master Direction is superseded?
Exports now follow a four-stage cycle under the 2026 regulations: declare, receive, realise and close. The AD bank does most of the checking, guided by its own published policy and SOP (Regulation 19).
- Declare the export. Goods exporters give the EDF at the time of export. Services and software exporters give the EDF within 30 days from the end of the month in which the invoice was raised, and one EDF can cover a whole month (Regulation 3). See EDF form for exports.
- Receive payment through an AD bank in the manner set by the FEMA (Manner of Receipt and Payment) Regulations, 2023 (Regulation 4(1)).
- The AD bank checks the transaction is genuine before crediting your account and updates the EDPMS entry at the same time (Regulation 4(2)).
- Realise the full value within nine months of invoice or shipment, or twelve months if invoiced or settled in rupees (Regulation 5(1)).
- Ask your AD bank for an extension or a reduction in value if the buyer pays late or pays less (Regulations 5 and 6).
- The AD bank marks off the EDPMS entry once realisation is confirmed and reports the transaction in FETERS (Regulation 18).
How are advance receipts for exports handled under the 2026 rules?
An advance and any later realisation must be routed through the same AD bank, or you must tell both banks if you switch (Regulation 10(1)). Interest on an export advance cannot exceed the all-in-cost ceiling for trade credit (Regulation 10(4)).
- The old Master Direction required shipment within three years of an advance (Master Direction, para C.2), raised from one year by the November 2025 amendment.
- Where no export is made and the advance cannot be refunded, the AD bank may close the EDPMS advance entry on your request (Regulation 18(1)(i)).
- The 2026 regulations do not state a separate shipment period for advances. Ask your AD bank what its SOP requires. See advance payment against exports.
How are small export invoices closed in EDPMS under the 2026 rules?
For a shipping bill or invoice up to ₹10 lakh, the EDPMS entry may be closed on your declaration that payment was realised in full or otherwise (first proviso to Regulation 4(2)). You can also give the declaration quarterly for bulk closure.
- The old Master Direction added a similar special procedure for entries of ₹10 lakh or less in October 2025 (Master Direction, para C.31).
- A reduction in value up to ₹10 lakh per invoice or shipping bill may also be allowed on your declaration (Regulation 6).
How does the AD bank's role change after the RBI Master Direction on Export of Goods and Services?
AD banks now decide most export cases themselves, including older transactions made before 1 October 2026 that needed RBI approval (Regulation 20). Each bank must publish its export policy and the main features of its SOP on its website (Regulation 19(4)).
- The policy must list documents, timelines and charges, and cover extensions, adjustments, advances and factoring (Regulation 19(1)).
- There must be a grievance escalation process and an appeal heard at a higher internal level (Regulation 19(2)).
- Banks cannot charge a penalty for a customer's regulatory delay, and charges must be reasonable (Regulation 19(3)).
What changed between the RBI Master Direction on Export of Goods and Services and the 2026 regulations?
The core obligation to realise and repatriate export value stayed the same. The fixed limits and RBI approvals in the old Master Direction were mostly replaced by AD bank discretion. The table compares the main points.
| Topic | Old Master Direction (to 30 Sep 2026) | 2026 regulations (from 1 Oct 2026) | Best for |
|---|---|---|---|
| Realisation period | Nine months from export (para A.2(i)) | Nine months from shipment or invoice; twelve months if invoiced or settled in rupees (Regulation 5(1)) | All exporters |
| Extension of time | AD bank up to six months at a time, with outstanding limits; other cases to RBI (para C.20) | AD bank may extend if satisfied with the reasons; no fixed cap stated (second proviso to Regulation 5(1)) | Exporters facing buyer delays. See extension of export realisation period |
| Software declaration | SOFTEX form to STPI or SEZ within 30 days of invoice or last invoice of the month (para B.5) | EDF to the specified authority within 30 days from the end of the invoice month (Regulation 3(2)) | Software exporters. See SOFTEX form filing |
| Other services | No declaration where no form applied (para B.7) | EDF to the AD bank, or on or before receipt of payment (Regulation 3(2)(b)) | Freelancers and consultants |
| Unpaid amounts | Write-off within 5% or 10% limits of the preceding calendar year's realisations (para C.23) | Reduction in export value allowed by the AD bank; on declaration up to ₹10 lakh (Regulation 6) | Exporters with bad debts. See write-off of export bills |
| Long-overdue exports | Caution listing by RBI on AD bank recommendation (para C.28) | Further exports only against full advance or irrevocable LC after one year overdue (Regulation 13) | Exporters with old outstanding entries |
| Set-off | Allowed under conditions in para C.26 | AD bank may allow set-off with the same party or its group companies (Regulation 7) | Firms that both export to and import from one party |
What happens if an exporter does not follow the rules that replaced the RBI Master Direction?
An exporter who does not realise proceeds within the Regulation 5 period, or any extension the AD bank allows, has not met the 2026 regulations. The open EDPMS entry stays with the AD bank for follow-up and can restrict future exports.
- Advance only: If proceeds stay unrealised for more than one year after the due or extended date, further exports need full advance or an irrevocable letter of credit (Regulation 13).
- Caution list: Exporters on RBI's caution list on 30 September 2026 remain under that order until removed (proviso to Regulation 13). See RBI exporter caution list.
- GST exposure: Services exported under LUT become liable to tax with interest if payment is not received within 15 days after one year from invoice, or the FEMA period with extension, whichever is later (CGST Rule 96A(1)(b)).
- Bank follow-up: Your AD bank must monitor and follow up open entries until they are closed (Regulations 5(2) and 18(1)(f)).
Speak to your AD bank before the realisation date. Ask for an extension with reasons and buyer emails, or for a reduction in value if the amount will not come. For small invoices, use the ₹10 lakh declaration route. See EDPMS closure and FEMA compounding for export delays.
Which RBI rule replaced the Master Direction on Export of Goods and Services?
A.P. (DIR Series) Circular No. 20 of 16 January 2026 superseded the Master Direction from 1 October 2026 (para 4). The FEMA (Export and Import of Goods and Services) Regulations, 2026, as amended on 22 September 2026, now set the rules.
| Circular or regulation | Clause | Date | Plain meaning | Best for |
|---|---|---|---|---|
| FEMA (Export and Import of Goods and Services) Regulations, 2026, FEMA 23(R)/2026-RB | Regulations 1 to 20 | 13 January 2026; in force 1 October 2026 | The current rules for exports, imports and merchanting trade | Every exporter from 1 October 2026 |
| Amendment Regulations, 2026, FEMA 23(R)/(1)/2026-RB | Regulations 5, 13 and 20 | 22 September 2026; Gazette 24 September 2026 | Set nine months (twelve for rupee trade) in place of fifteen and eighteen, kept existing caution list orders, and let AD banks handle older cases that needed RBI approval | Anyone who read about a 15-month rule |
| A.P. (DIR Series) Circular No. 20, RBI/2025-26/194 | Paras 4 and 7, and Annex | 16 January 2026; in force 1 October 2026 | Supersedes the export and import Master Directions and 96 export circulars, including the SOFTEX circulars | Checking whether an old circular still applies |
| Master Direction: Export of Goods and Services, FED Master Direction No. 16/2015-16 | Parts A to D | 1 January 2016; updated to 17 July 2026; superseded 1 October 2026 | The old compiled instructions | Understanding exports made before October 2026 |
| First Amendment Regulations, 2026, FEMA 23(R)/(8)/2026-RB | Regulation 9 of the 2015 regulations | 5 June 2026 | Cut the old realisation period from fifteen months back to nine | Exports made from June to September 2026 |
| Second Amendment Regulations, 2025, FEMA 23(R)/(7)/2025-RB | Regulations 9 and 15 of the 2015 regulations | 13 November 2025 | Raised realisation to fifteen months and advance shipment time to three years | Exports made from November 2025 to June 2026 |
What are common mistakes when relying on the RBI Master Direction on Export of Goods and Services?
- Outdated source: Quoting Master Direction paragraph numbers for exports made on or after 1 October 2026, when the 2026 regulations now apply.
- Old SOFTEX: Filing a SOFTEX form for software exported from October 2026 instead of the EDF under Regulation 3(2).
- Fifteen months: Assuming the fifteen-month period still applies. It was cut back to nine months in June 2026 and again in the new regulations.
- Write-off limits: Applying the old 5% and 10% write-off limits instead of asking for a reduction in value under Regulation 6.
- Split banks: Taking an advance through one AD bank and the balance through another without telling both, as Regulation 10(1) requires.
- Ignoring SOP: Not reading your AD bank's published export policy, which now sets documents, timelines and charges.
How did we verify this?
Every rule, deadline and form on this page is linked to its official source, checked on the dates below.
- Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, Notification FEMA 23(R)/2026-RB dated 13 January 2026, amended up to 22 September 2026, Regulations 1 to 20 and footnotes on FEMA 23(R)/(1)/2026-RB (checked 8 Oct 2026)
- RBI A.P. (DIR Series) Circular No. 20, RBI/2025-26/194: Export and Import of Goods and Services, 16 January 2026, Paras 1, 4, 7 and Annex A (checked 8 Oct 2026)
- RBI Master Direction: Export of Goods and Services, FED Master Direction No. 16/2015-16 (updated as on 17 July 2026), Opening paras; A.2, B.5, B.7, C.2, C.20, C.23, C.26, C.28, C.30, C.31 (checked 8 Oct 2026)
- Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2025, FEMA 23(R)/(7)/2025-RB, 13 November 2025, Paras 2 and 3 (checked 8 Oct 2026)
- Foreign Exchange Management (Export of Goods and Services) (First Amendment) Regulations, 2026, FEMA 23(R)/(8)/2026-RB, 5 June 2026, Para 2 (checked 8 Oct 2026)
- Central Goods and Services Tax Rules, 2017: Rule 96A, Rule 96A(1)(b) (checked 8 Oct 2026)
Frequently asked questions
Is the RBI Master Direction on Export of Goods and Services still valid in October 2026?
No. A.P. (DIR Series) Circular No. 20 superseded the Master Direction on Export of Goods and Services from 1 October 2026. Exports from that date follow the FEMA (Export and Import of Goods and Services) Regulations, 2026. AD banks also handle older cases that needed RBI approval under the old rules.
Does SOFTEX still apply after the RBI Master Direction on Export of Goods and Services was superseded?
The SOFTEX circulars were among those superseded on 1 October 2026. Under Regulation 3(2), software exporters now give an EDF to the specified authority, which can be an AD bank, STPI or the SEZ Development Commissioner, within 30 days from the end of the invoice month. See what is SOFTEX.
What is the FED Master Direction No. 16/2015-16 number used for?
FED Master Direction No. 16/2015-16 is the reference number of RBI's Master Direction on Export of Goods and Services, dated 1 January 2016. Banks and older guides cite it for export rules. Its last update was on 17 July 2026, and it was superseded from 1 October 2026.
Do freelancers need to file an EDF under the 2026 export regulations?
Regulation 3(2) asks every exporter of services to declare the full export value in an EDF to the specified authority. An exporter of services other than software may submit it on or before the date of receipt of payment. Ask your AD bank how it collects this declaration for freelance receipts.
Is the eBRC still issued after the Master Direction on Export of Goods and Services ended?
Paragraph C.30 of the old Master Direction required banks to generate eBRCs from EDPMS data. The 2026 regulations do not mention the eBRC, though banks must still update EDPMS and report in FETERS under Regulation 18. Check with your AD bank how it now issues realisation certificates.
Where can exporters find their AD bank's export SOP under Regulation 19?
Regulation 19(4) requires every AD bank to disclose its export and import policy and the main features of its SOP on its website. The policy must list documents, timelines and charges for each process. If you cannot find it, ask your branch or the bank's trade finance desk for the published version.
Can an exporter appeal an AD bank decision under the 2026 export regulations?
Yes. Regulation 19(2) requires each AD bank's policy and SOP to include an escalation process for customer grievances and an appeal mechanism. The appeal is handled at a higher internal level, which must decide based on the genuineness of the exporter's submissions. Keep buyer correspondence and invoices ready for the appeal.